If you’re struggling just to make ends meet, managing your credit may not be a priority at the moment. But ignoring your credit during this crisis can have significant implications and make it even more difficult to stay afloat down the line.
Your credit score will affect whether you qualify for new credit lines or increases to existing lines — and it can also determine how much you’ll pay in interest. Good credit can be a lifeline during a financial emergency. Here are some things you can do to protect yours during this difficult time.
Pay bills on time. Late payments can significantly damage your credit score, so staying on time is critical. With so much on your mind right now — and when it’s sometimes difficult to even remember what day of the week it is — automatic payments can be a big time- and credit-saver. You can use online bill payment services from your bank or enroll your household bills in AutoPayPlus so they’re paid on time every time without late fees or negative consequences to your credit .
Talk to your creditors. If you have a problem meeting your obligations, don’t simply stick your head in the sand and hope for the best. Instead, call your creditors and explain your difficulties — preferably before you miss a due date. Ask if you can delay any payments or make a reduced payment. If they agree, you may be eligible for the CARES Act credit protections described below.
Understand CARES Act protections. Under the CARES Act, if you’ve made an accommodation such as forbearance or partial payments or other modification with a creditor, the creditor must report that account as current to credit bureaus so long as the account was already current at the time of the accommodation. If the loan was past due at the time of the agreement, it will continue to be reported as delinquent until the account is brought back up to date, at which point the creditor must report the status as current.
According to Experian, “The CARES Act protections require creditors to follow these guidelines for all agreements made between January 31, 2020, through either July 25, 2020 (120 days after March 27, 2020, when the law was enacted), or 120 days from the date the COVID-19 national emergency is declared over.” Talk to your creditors to see if your circumstances fall under the CARES Act and document all communications to protect yourself.
Check your credit reports and scores. You’re entitled to one free report every 12 months from each of the three credit reporting agencies: Equifax, TransUnion and Experian. It’s important to review your report from all agencies to ensure there are no mistakes that might lower your credit score. If you notice any errors on your report, you can dispute them. According to the Fair Credit Reporting Act (FCRA), the agency generally has 30 days to verify the error with the creditor or else it must be removed from the report. Any corrections must be reported to other credit bureaus as well. AutoPayPlus gives its customers online access to their TransUnion VantageScore, which can give you a quick snapshot of the health of your credit.
Monitor your credit. Scammers are out in full force during COVID-19. But you can help protect your identity by signing up for a credit monitoring service. AutoPayPlus offers credit and identity theft monitoring to all its customers. Credit monitoring can alert you to any fraudulent activity related to your credit and help prevent further damage.
Explain yourself. If you feel that there’s damaging information on your credit report that could benefit from an explanation, consider adding a consumer statement to your report. You’re entitled to add a 100-word statement (up to 200 words in the state of Maine) to your credit reports to explain your financial circumstances, although you may have to pay a fee for this service.
Your credit score is not a measure of your worth, but it is a number that can exert a tremendous amount of influence over your financial life for better or worse. It’s important during this crisis to do all you can to keep yours in good standing.
10 Tips for Protecting Your Credit During COVID-19
- Make timely payments. Payment history is a large determinant of your credit score, so do all you can to make payments on time, even if it’s just the minimum due.
- Review receipts and statements. Check credit card receipts before you sign and don’t leave spaces where anyone can alter the total you fill in. Check monthly statements against your receipts each month for fraudulent charges.
- Beware of scammers. Fraudsters are trying to capitalize on the fears of consumers during COVID-19. Never give your account information online or over the phone unless you trust the source.
- Protect your credit card information. When out in public, don’t leave your credit card visible where others can see it — like on the table at a restaurant.
- Avoid public Wi-Fi when making financial transactions. Public Wi-Fi networks may not be secure, and unscrupulous bystanders may exploit them to capture your personal information and steal your identity.
- Be smart with passwords and PINS. Choose strong and unique passwords for all your accounts. Avoid using the same password on retail accounts and your bank or financial institutions. Don’t choose easy to guess PIN numbers like your birthday.
- Sign up for credit monitoring. You can’t watch over your credit all the time, but a credit monitoring service can alert you to potentially fraudulent activity. AutoPayPlus offers credit monitoring to all its customers.
- Pay bills automatically. Enrolling your bills in an online payment program like AutoPayPlus can help you protect your credit and avoid late fees.
- Monitor your credit. With so much else on your mind right now, it’s a smart idea to have someone else watch over your credit when you can’t. AutoPayPlus customers enjoy credit monitoring and identity theft protection. Call (800) 894-5000 to find out more.
- Make a statement. If you disagree with any negative information on your credit report, dispute it. You can also add a personal statement to your report to further explain your situation, although you may have to pay a fee in order to do this and have it sent out to any inquiring creditors.